Johnson v. Igleheart Bros., 6277.
Decision Date | 09 March 1938 |
Docket Number | No. 6277.,6277. |
Citation | 95 F.2d 4 |
Parties | JOHNSON v. IGLEHEART BROS., Inc. |
Court | U.S. Court of Appeals — Seventh Circuit |
Emra H. Ireland, of Evansville, Ind., for appellant.
Joseph H. Iglehart, of Evansville, Ind. (George S. Herr and O. McPeak, both of New York City, of counsel), for appellee.
Before EVANS and MAJOR, Circuit Judges and LINDLEY, District Judge.
This is an appeal from a judgment of the District Court sustaining defendant's demurrer to paragraphs 1 and 2 of plaintiff's complaint. The action is one at law commenced March 2, 1936, based upon seven written contracts to recover the sum of $26,910 representing a part of the contract price of flour purchased by plaintiff from defendant and claimed by the plaintiff to represent an amount paid by him to the defendant to cover processing tax imposed upon the latter under the provisions of the Agricultural Adjustment Act, as amended, U.S.C.A. title 7, § 601 et seq. The contracts declared upon are referred to as Exhibits A to G, inclusive. The exhibits are attached to and made a part of the complaint; Exhibits A, B, and C, referred to as Group I, being attached to paragraph 1 of the complaint, and Exhibits D, E, F, and G, referred to as Group II, attached to paragraph 2 of the complaint. In the first paragraph, it is alleged that the plaintiff purchased flour on September 22, 1933, April 13, 1934, and July 26, 1934, from defendant in quantities and at contract prices as specified in the contracts attached thereto; and in the second paragraph it is alleged that the plaintiff, on August 14, 1934, October 27, 1934, April 29, 1935, and June 5, 1935, purchased flour in quantities and at prices specified in copies of the contracts attached thereto.
In each paragraph of the complaint, it is alleged that the plaintiff is engaged in the buying and selling of grain and flour and other mill products; that the defendant is engaged in the milling business; that when contracts were entered into the Agricultural Adjustment Act was in force and effect under the authority of which a processing tax was fixed by the Secretary of Agriculture; that after the contracts were executed, the plaintiff received and paid for all the flour mentioned in said contracts, that the said act was declared unconstitutional by the Supreme Court of the United States, and that the defendant refused to repay the sum of $8,970, being the amount of the tax on the flour purchased under the contracts in Group I and refused to repay $17,940, being the tax imposed under the contracts referred to in Group II. The complaint also contains the inconsistent allegations, both that the processing taxes were paid by the defendant and that the defendant failed and refused to pay said taxes to the United States Government.
All the contracts in question, executed at various times from September 22, 1933, to June 5, 1935, set forth the number of barrels of flour purchased, the dates when the same were to be delivered and the contract price, ranging from $4.95 to $5.90 per barrel, no mention being made of the amount of the processing tax included in the purchase price.
Inasmuch as this controversy revolves largely around the provisions in the contracts with reference to the processing taxes, there must necessarily be a construction of the language employed by the parties with reference thereto. The contracts referred to in Group I contained identical phraseology in this respect and so do the contracts referred to in Group II, but there is found some difference in the language employed in this respect between the two groups of contracts. The contracts in both groups provide: "It is understood and agreed that there are no conditions, except as specified herein; that there shall be no assignment; and that no agent has authority to change the terms of this contract."
The contracts of Group I contain only the following provision with reference to processing taxes:
The contracts of Group II contained a similar provision concerning taxes, the essential difference being the provision where such taxes are decreased, which is as follows: "If any tax included in the price hereof shall be decreased or abated, then, in that event, said decrease or abatement shall be deducted from the price hereof."
In discussing the question with which we are presented, it might be well for us to first determine what is admitted by the demurrer under the circumstances here existing, but before so doing, we shall dispose of a question which defendant insists is determinative of plaintiff's right to recover. As heretofore pointed out, the complaint contains the inconsistent allegations both that the processing taxes were paid by the defendant and also that he failed and refused to pay said taxes to the United States Government. It is obvious that such allegations are contradictory and that both could not be true. No doubt, the pleader, in place of the allegation "which taxes were paid by the defendant" intended to allege "which taxes were to be paid by the defendant," and that the words "to be" were unintentionally omitted, due perhaps to a typographical error. It was the duty of the defendant to specifically point out, in support of its demurrer, wherein the complaint was deficient. U.S.C.A. title 28, § 777. This, it failed to do. If the practice in this respect had been complied with and plaintiff advised of the inconsistent allegation, he would have had an opportunity to amend his complaint. The defendant having failed so to do, we are of the opinion it is in no position here to maintain such contention. At any rate, we are not willing to base our decision upon such reasoning.
Concerning the effect of the demurrer, it seems to be the position of plaintiff that the defendant, by making such attack upon the complaint, admits the allegations thereof, or at any rate, such allegations as are well pleaded. Generally, of course, that is the case, but it seems where an action is based upon a written contract, a copy of which is attached to the complaint, a somewhat different effect is had, or perhaps it would be more accurate to say that the court must look to the contract in determining what allegations of the complaint are properly pleaded.
In Inter-State Land Co. v. Maxwell Land Co., 139 U.S. 569, on page 577, 11 S.Ct. 656, 659, 35 L.Ed. 278, the court said:
Also, in St. Louis, etc., Railroad Co. v. U. S., 267 U.S. 346, on page 349, 45 S.Ct. 245, 246, 69 L.Ed. 649, which was an action upon contract, the court in discussing the effect of a demurrer said:
It is at once apparent that the court must construe the contracts themselves, and that plaintiff's rights must be determined by the terms thereof rather than by the allegations of his complaint. To enumerate and comment upon various allegations of the complaint which merely represent the conclusion of the pleader, being the construction which he places upon the contracts, would unduly prolong this opinion. There is one allegation, however, which, because of its pertinency, we quote as follows: "That by so specifically including said processing tax in the respective prices paid by plaintiff to the defendant in the respective purchases of said flour under said contracts, the defendant promised to restore to plaintiff the amounts of said processing tax in the event of the annulment of said tax or defendant's failure to pay said amount of processing taxes to the Government as required."
It will be noted that the contracts make express provision for the protection of the seller in the event the processing taxes are increased and for the protection of the buyer in case said taxes are reduced, decreased or abated, and that there it no provision as to what...
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...are clear would be the writing of an agreement into which the parties had not entered." This language was quoted in Johnson v. Ingleheart Brothers, 7 Cir., 95 F.2d 4, 9. A court of this circuit, consisting of the three judges presently sitting, affirmed a judgment entered by Judge Miller (t......
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